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Source: The Buffalo News

Coal-fired power plan left out of state budget

Bid to help plants here sell electricity fails


Posted: March 29, 2012
Originally Published: March 27, 2012

A proposal that would have called on the New York Power Authority to buy the electricity generated by Western New York's struggling coal-fired power plants failed to make it into the state budget.

The budget provision, backed by State Sens. Catharine Young, R-Olean, and George D. Maziarz, R-Newfane, would have authorized the New York Power Authority to purchase the electricity generated by Western New York's coal-fired plants for three years.

Supporters argued that the power purchases would provide a lifeline to the region's power plants at a time when low natural gas prices have made the electricity produced at those coal-fired plants too costly to be competitive with gas-fired plants in the state's wholesale power market.

Opponents, including a coalition of environmental, energy and health groups, argued that the provision would aid coal-fired plants that contribute to pollution at a time when the focus should be on less polluting renewable energy alternatives.

"The governor and legislature should be commended for rejecting ill-conceived proposals that would have set the clocks back on New York's push to build a clean, renewable energy future," said Brian P. Smith, the program and communications director for Citizens Campaign for the Environment.

NRG Energy, the owner of the 530-megawatt coal-fired power plant in Dunkirk, earlier this month filed a notice with the state Public Service Commission to mothball the plant by Sept. 10 unless it is determined that doing so will affect the reliability of the state's power grid.

NRG executives have said the Dunkirk plant's best hope is a PSC ruling that says mothballing the facility would put the reliability of the state's power supplies at risk. If that's the case, the PSC could mandate that NRG and National Grid work out a deal to buy the plant's electricity -- possibly from as little as one of its four units -- to keep the facility operating and ready to ramp up production when it's needed.

Another local coal-fired plant, the Somerset facility owned by AES Corp. in the Town of Barker, has been operating under bankruptcy court protection since late December.

That bankruptcy filing included a prearranged $300 million deal to sell the 675-megawatt Somerset facility and 306-megawatt sister plant in Lansing, Tompkins County, to a group of its bondholders.

Because no competing bids were submitted to purchase the two plants, an auction that the bankruptcy court had scheduled for Monday was canceled, and a hearing to approve the sale to the bondholders is scheduled for today.